Microsemi Corp.’s Chief Executive Jim Peterson, who’s run the Irvine-based chipmaker for nearly a decade, has been having a tough go these past few months.
The company, which had a recent market value of about $670 million, has faced slumping demand for its high-reliability chips that are built for defense, aerospace and industrial uses.
In mid-December, the company got slapped with an antitrust lawsuit from the Department of Justice.
The suit claims the company’s $25 million buy of Costa Mesa-based Semicoa Semicon-ductors Inc. in July created a monopoly on certain types of chips.
Also in December, its shares got hammered after a tip by a short-selling investor spurred an inquiry into Peterson’s education background.
The background check alleged Peterson didn’t hold degrees from Brigham Young University as claimed on his official biography.
The company’s board recently wrapped up its own investigation into the dustup around Peterson’s education background, which now is called “diplomagate” by some.
Bottom line: Peterson lied about receiving degrees from BYU, but the board opted not to fire him.
“Despite the results of the inquiry, we recognize that our chief executive officer, Jim Peterson, has built a highly successful and profitable enterprise at Microsemi during the past nine years, with a strong business plan and vision for the future,” the company said in a statement.
For its internal audit, the board hired Los Angeles-based law firm Munger, Tolles & Olson LLP, which found that Peterson did not obtain either a bachelor’s or business master’s from the school.
Peterson did earn an associate (two-year) degree from Ricks College, which is currently known as BYU, Idaho, in 1978. He also earned credits toward a bachelor’s degree at BYU’s main campus in Provo, Utah.
The board handed down a list of penalties to Peterson, who is expected to a pay $100,000 and forgo his bonus for the year, among other things.
Microsemi said it’s vowed to put processes in place to ensure that all employees’ educational credentials are legit. It also plans to amend its internal ethical code with a provision about “misrepresenting credentials” that could result in fines or losing a post.
Like the board, some company watchers are confident that Peterson will dust himself off.
“We believe this resolution of the uncertainty is a positive for shares of Microsemi, and, while some investors will continue to be skeptical about Peterson’s credibility, we would argue he does get the job done when it comes time to putting up impressive financial results,” said Craig Berger, an analyst at Friedman, Billings, Ramsey & Co. in New York.
Others worry that investors’ skepticism might continue to be a drag on the stock.
“The board’s finding and decision does little in the eyes of many investors to remove the management credibility overhang currently pressuring Microsemi and we expect shares to remain capped as a result,” said Rick Shafer, an analyst at Oppenheimer & Co. in New York.
Shares are off about 50% since Dec. 3, when the company’s troubles started.
Microsemi also is facing a Securities and Ex-change Commission review to see if Peterson misled investors when he repeatedly denied allegations that he lied about his degrees.
Sendio’s $3M Funding
Irvine’s Sendio Inc., which makes software that seeks to eliminate e-mail spam, raised nearly $3 million in its second round of venture funding.
The round brings Sendio’s total raised to
$9 million.
The head investor was Athenian Venture Partners. Athenian’s Francois Helou got a seat on Sendio’s board.
Past investors include Vicente Capital Partners, Shepherd Ventures and Momentum Venture Management.
Sendio plans to spend the money to beef up its sales and marketing efforts, said Chief Executive Kevin Bowyer.
Last year, the company added a sales executive and five sales people. It plans to add another eight or so this year, Bowyer said.
Sendio also has plans to invest in its reseller channels and set some money aside for attending high-profile trade shows that focus on security technologies.
The company sells servers loaded with its software to companies with 25 to 15,000 e-mail users. The software is sold in packs of 50 licenses on a subscription basis.
It is targeting law firms, casinos, local governments, hospitals and financial services companies as customers.
Sendio plans to go after sales to the federal government this year.
The company, which has about 30 workers here, declined to disclose sales figures or say if it’s profitable.
Bowyer said revenue roughly doubled in 2008 from 2007.
Networks in Motion Sales
A few weeks ago in the column I gave Aliso Viejo’s Networks in Motion Inc. short shrift.
The company saw 2008 sales of $40 million, up from $16 million in 2007, according to Chief Executive Doug Antone.
